Obama is asking that tax cuts make up 40 percent of a stimulus package, the people say. The measure may be worth as much as $775 billion, a Democratic aide says, meaning tax cuts may constitute more than $300 billion of the legislation.

The dollar today rose to the highest level in almost three weeks against the euro and also surged against the yen on speculation that the Obama plan would help the U.S. economy recover from recession.

Making tax cuts such a large part of the stimulus may help win support from congressional Republicans. Senate Minority Leader Mitch McConnell, a Kentucky Republican, said his party would support an immediate middle-class tax cut as part of any stimulus package.

“Republicans, by and large, think tax relief is a great way to get money to people immediately,” McConnell said yesterday on ABC’s “This Week.”

The plan would attempt to boost consumer demand by spending $140 billion on tax breaks worth $500 for individuals and $1,000 for couples, according to a House Democratic aide. The change would come by altering tax-withholding rules, rather than through a rebate check as with the previous stimulus plan enacted last year, so that workers would see an immediate increase in their take-home pay.

The $500 tax credit would apply to the first $8,100 of wages, meaning a worker who earns $24,400 a year and is paid twice a month would get about $60 extra per paycheck for four months.

Business Tax Breaks

For businesses, the aide said, lawmakers will use similar measures they’ve employed in past stimulus bills, such as allowing companies to get refunds for taxes paid in any or all of the past five years by deducting losses they’ve incurred now; those losses can currently only be carried back two years.

Congress is also likely to include incentives such as accelerated depreciation to encourage companies to buy equipment now rather than defer such investments. The plan also attempts to combat joblessness by offering companies tax breaks for hiring more workers, the aide said cash advance no fax.

The tax provisions are also likely to repeal the alternative minimum tax on municipal bonds issued to build airport runways, sewer systems and other privately run facilities that benefit the population at large, another aide said. Congress is unlikely to enact a new round of incentives for U.S.-based multinational corporations to repatriate foreign earnings at a discounted tax rate as urged by business groups such as the Chamber of Commerce, that aide said.

Accelerated Tax Breaks

Many of the business tax incentives would be accelerated so that any dollar written off now would not be able to be claimed in future years, the aide said. That would reduce the long-term impact of the tax cuts on the federal budget deficit.

Obama is slated to meet today with congressional leaders from both parties to discuss the plan. Democrats said Congress probably won’t be able to complete work on the plan by January 20, the day of the inauguration, as some had hoped.

“It’s going to be very difficult to get a package put together that early,” said House Majority Leader Steny Hoyer in an interview on “Fox News Sunday.” “We want to do this right.” He said he expects the House to pass the bill by the end of the month and get the legislation through the Senate and signed into law in February.

Urgency

Senate Majority Leader Harry Reid, in an interview yesterday on NBC’s “Meet the Press,” downplayed the importance of what he called a “false” deadline. “The urgency of this, everyone knows about — but I’m not going to have some false deadline,” Reid said. “It’ll take as much time as it needs to get done.”

Obama has called on lawmakers to quickly pass legislation to prop up the economy, which is in its worst slump in decades and could deteriorate further without significant fiscal stimulus. Economists surveyed by Bloomberg last month projected gross domestic product would shrink in the fourth quarter by 4.3 percent, the biggest decline since 1982.

Source

Gas prices fell for the tenth consecutive day Monday, according to motorist group AAA. Regular unleaded fell to an average of $1.619 a gallon, the lowest since gas hit $1.617 a gallon in January 2004.

Prices are down nearly $2.50, or more than 60%, since hitting a record average high of $4.114 a gallon this July. Prices have plummeted along with the price of crude oil, the main ingredient in gas, as the current economic has crisis intensified and threatened demand for petroleum-based fuels.

Oil has shed more than $100 a barrel since July.

"When you have the price for the raw material drop over $100 a barrel, that’s why you see the price of gasoline drop," said AAA spokesman Troy Green.

In the United States, the world’s largest oil consumer, citizens drove 100 billion fewer miles during the 12-month period between November 2007 and October 2008 compared with the prior year, according to the U.S. Department of Transportation.

And crude demand in China fell 3 payday cash advances.2% in November compared to the prior year due to lower imports and a decline in refinery usage, according to estimates compiled by Reuters.

Gas may continue to sell at record lows heading into 2009 unless economic activity shows some sign of recovery, according to Green.

Usually gas prices rise in the spring as Americans take to the road.

"Will the economy be in such bad shape that we don’t see that typical runup?" posed Green.

State prices: Prices remained above $2 a gallon in only two states Monday: Alaska ($2.518) and Hawaii ($2.332).

Gas was cheapest in Missouri at $1.419 a gallon on average, and sold for less than $1.50 on average in ten states.

Diesel: Meanwhile the price of diesel fuel, which is used in most trucks and commercial vehicles, fell to $2.435 on average Monday.

The AAA figures, compiled by Oil Price Information Services, are state-wide averages based on credit card swipes at up to 100,000 service stations across the nation. 

Source

Gross domestic product in the three months ending Dec. 31 will decline more than the 2.7 percent previously predicted, said Tomoko Fujii, head of Japan economics and strategy at Bank of America in Tokyo.

Companies from Toyota Motor Corp. to Sony Corp. idled plants and fired workers this quarter as recessions in the U.S. and Europe caused sales of cars and televisions to collapse. The global slump is spreading to developing markets including Asia, the destination for about half of Japanese exports.

“External demand has vanished all of a sudden,” said Fujii. “Almost every industrialized nation is in a recession. Even in China, growth is slowing sharply.”

A 6.5 percent annualized contraction would be the steepest since the first quarter of 1998, when the Asian financial crisis and a sales-tax increase led to a 7.5 percent decline. The world’s second-largest economy shrank in each of the past two quarters, entering the first recession since 2001 no teletrak payday loan.

Factory output plunged 8.1 percent in November from October, the most since comparable data were first kept 55 years ago. Exports slid an unprecedented 26.7 percent from a year earlier.

Consumers at home are unlikely to pick up the slack. Household confidence is at a record low and the government has indicated it doesn’t plan to add to two stimulus packages it has yet to implement.

“Japan needs further economic measures as demand from abroad is totally lacking and will probably decline further in the first quarter,” Fujii said.

Finance Minister Shoichi Nakagawa told the Financial Times that the government has no immediate plans to draft another stimulus, saying its priority is to carry out measures announced since October. The plans, which include spending about 10 trillion yen ($110 billion) on employment and aid for households, still await parliamentary approval.

Source

At least they will be able to get unemployment insurance.

Most jobless workers can’t.

Across the United States, only 37 percent of workers who lose their jobs typically collect unemployment benefits, according to U.S. Labor Department statistics.

They often miss out because they didn’t earn enough while working, or their work history was not continuous enough to make them eligible under state unemployment laws — usually written in the pre-computer era when tracking payrolls was much slower.

"I think it’s a shock to people that the safety net is in such sad shape," said Maurice Emsellem, co-policy director at the National Employment Law Project, a pro-worker organization advocating for the bill. "A lot of people fall through the cracks."

At a time when the recession is a year old and the number of unemployed has risen to 10.3 million, there is a real question about where federal unemployment dollars should go.

Should they be sent directly to states’ strained employment trust funds, enabling states to keep from raising unemployment taxes on already beleaguered employers? Or should they go to expanding eligibility, supporting states whose policies provide help to more people, who in turn will spend their benefits and boost the economy?

Last year, that approach became part of a federal bill — the Unemployment Insurance Modernization Act — passed in the House, but not the Senate, although then-Sen. Barack Obama was a sponsor.

Advocates like Emsellem always try to expand benefits in tough times, said Douglas J. Holmes, president of the National Foundation for Unemployment Compensation and Workers’ Compensation, a Washington business group. It would be better to skip the debate and ship the money to the state trust funds quickly, he said. "Federal money is not designed to dictate benefits state by state."

RELATED LINKS

 Get more business news, blogs and opinion

Those who fall through the cracks tend to be low-wage, part-time, seasonal or new workers — not like the 1,000 autoworkers laid off in Delaware.

"Although low-wage workers were almost 2

The confidence index for Belgium, whose government is reeling from a crisis surrounding the state-organized breakup of Fortis, plunged to minus 31.3 from minus 23.7 in November, the Brussels-based National Bank of Belgium said today in an e-mailed statement. That is the lowest since the data were first collated in 1980. Economists expected a decline to minus 26, according to the median of 19 estimates in a Bloomberg News survey.

Business and consumer confidence across Europe is tumbling as the financial turmoil saps demand for exports and unemployment rises. In Belgium, where the prime minister offered to resign over allegations his government tried to interfere with a court ruling on the Fortis breakup, the economy is forecast to shrink in 2009 for the first time in 16 years, the central bank said this month.

Confidence in Europe is “at a record low already. How deep, how low can you go?” Carsten Brzeski, an economist at ING Group in Brussels, said on Bloomberg Television today. “Unfortunately, there is some scope to see a further deterioration.”

European executive and consumer confidence in the economic outlook has dropped to a 15-year low even after interest-rate cuts and government stimulus measures aimed at battling the impact of the financial crisis health insurance. Executive sentiment in Germany, the region’s largest economy, slumped to the lowest level in more than a quarter-century in December, data showed last week.

Slowest Pace

Belgium’s economy grew at the slowest pace in five years in the third quarter and the drop in business confidence indicates the slump will extend into 2009. Gross domestic product will contract 0.2 percent next year after growing 1.4 percent this year, the central bank forecast on Dec. 8, revising a June forecast for 2009 expansion of 1.5 percent.

The Belgian king is working to name a new prime minister by Christmas after Yves Leterme tendered his resignation Dec. 19, with the fate of Fortis, formerly the nation’s largest financial- services firm, hanging in the balance. Leterme yesterday ruled himself out as the leader of a new government.

Leterme’s coalition collapsed after the Justice minister quit because the nation’s highest appeals court didn’t clear him from allegations of interfering with a ruling that blocked the sale of Fortis assets to BNP Paribas SA.

Source

Canada’s top court has ruled against the idea that the interests of shareholders supersede other stakeholders in a corporation, such as investors who have bought bonds.

The clarifications governing corporate law in Canada come from a 76-page written judgment on a decision the court made in June, when it gave the go-ahead on the planned privatization of BCE Inc., owner of Bell Canada.

Both the written reasons – and the original ruling – were unanimous, giving greater clarity to the rights of directors and stakeholders of corporations.

The court noted that, in most cases, the interests of the corporation and its investors and creditors were identical, but as was the case with BCE’s proposed acquisition by a group of investors headed by the Ontario Teachers’ Pension Plan, sometimes conflicts arise.

"Directors may find themselves in a situation where it is impossible to please all stakeholders," the court said.

"In each case, the question is whether, in all the circumstances, the directors acted in the best interests of the corporation, having regard to all relevant considerations, including, but not confined to, the need to treat affected shareholders in a fair manner."

The written ruling will bring no comfort to BCE, or shareholders who stood to benefit from the $42.75 per share sale price. It comes just over a week after the $52 billion leveraged buyout collapsed because of volatile credit markets and the impact of the North American recession.

The written reasons, nevertheless, were called important by Michael Gans, a partner with Blake, Cassels & Graydon LLP, for clarifying points of confusion that arose from an earlier decision the Quebec Court of Appeal cited to rule against the acquisition bad credit pay day loans.

In that case, the Quebec court found BCE’s directors did not give adequate consideration to how the deal would impact bondholders. Bondholders had argued that BCE would be crippled by taking on $34 billion in debt and that the value of their bonds would be diminished.

Gans said the Supreme Court found BCE had considered the effect on bondholders but decided the directors were acting in the best interest of the corporation.

"If you are a director of a Canadian corporation, you can feel good about this judgment, because it gives you significant leeway to do your job as long as you do so in a reasonable and informed manner," he said.

Gans said the top court made clear Canadian law differs from the U.S., where judgments have placed shareholders at the top of the totem pole in a contest of interests.

"There is no principle that one set of interests – for example the interests of shareholders – should prevail over another set of interests," the court wrote.

"Everything depends on the particular situation faced by the directors and whether … they exercised business judgment in a responsible way."

The ruling will likely be used to clarify the relationships of corporate executives, shareholders and bondholders in future mergers, bankruptcies or hostile takeovers when stakeholder interests collide.

In June, the Supreme Court had approved the "plan of arrangement" – dismissing a challenge from bondholders that their interests had not been protected – but given the time constraints issued no reasons for its decision.

That ruling appeared to clear the last hurdle to the world’s largest leveraged buyout … until the size of the debt proved a bridge too far.

Source

It is the third time producers have agreed to reduce their output in three months. Since September, members of the Organization of the Petroleum Exporting Countries have pledged cuts totaling 4.2 million barrels a day, or nearly 12 percent of their capacity, a record in such a short time.

But oil futures fell more than 8 percent, or $3.54, to settle at $40.06 a barrel, on Wednesday, as the market focused on the dire state of the global economy, and many experts doubted that OPEC would manage to carry out its promises, leaving markets oversupplied in the face of falling demand.

After riding a wave of rising oil prices for nearly a decade, the world’s top exporters are struggling in a weakening global economy, a dizzying slump in oil consumption and a sharp downfall in prices. In a move reminiscent of 1998, when oil fell below $10 a barrel, OPEC has asked outside producers to trim their production but seems to have found few takers.

"We want non-OPEC countries to contribute, and not just benefit from the impact of our cuts," Chakib Khelil, OPEC’s current president, said after the meeting, which was held under tight security in the coastal Algerian town of Oran.

"It’s in their own interest as well as in ours." Khelil said at a chaotic and confused news conference after the meeting.

Russia, which is not part of OPEC, sent a large delegation to Algeria, but analysts saw this as a gesture of political support that carried little more than symbolic value. Russian oil production is going to decline this year anyway because of government policies that have discouraged investments and harmed domestic producers.

The oil collapse has brought down gasoline prices for consumers, but it is devastating to producers, who have based their budgets for next year assuming prices well above $50 a barrel on line pay day loans.

The Saudi oil minister, Ali al-Naimi, set the tone on Tuesday as he arrived in Algeria, when he proposed a large cut to balance the market and trim commercial oil inventories that have been swelling well above their historic levels. Other representatives quickly backed the proposal.

The Saudis had until now been wary of acting too aggressively lest they derail any economic recovery. In June, as prices were still rising, they pledged to flood the market to prevent prices from spiking. But that did not prevent oil from rising above $145 a barrel the following month.

RELATED LINKS

 Get more business news, blogs and opinion

Now, with the economy seizing up, the Saudis seem to have become much more concerned with the drop in prices, and their ability to prevent a complete collapse. Oil has fallen by $100 a barrel, or 70 percent, since peaking five months ago. King Abdullah recently said he would like to see prices at $75 a barrel, more than 50 percent above their current levels.

The cartel has not faced such a challenging environment since the early 1980s. Oil consumption is set to decline for the first time in 25 years because of the economic crisis.

The new target sets OPEC’s production at 24.85 million barrels a day, starting Jan. 1.

Source

The Monetary Policy Committee, led by Governor Mervyn King, voted 9-0 to bring the rate to the lowest since 1951, minutes of the Dec. 4 decision published in London today show. While the economic outlook had worsened, a cut of more than one point may push the currency down too far and “undermine confidence in the economy more widely,” the minutes said.

The pound dropped to a record low against the euro after data showed unemployment rose in November at the fastest pace since 1991. King has signaled that the bank will cut the interest rate further if needed and the U.S. Federal Reserve yesterday lowered its rate close to zero.

“Given the significant probability of undershooting the inflation target in the medium term, a cut of at least 100 basis points was needed,” the minutes said. A larger reduction “might be justified by the scale of the downside risks to inflation.”

The number of people receiving jobless benefits rose 75,700 to 1.07 million, the highest level since July 2000, the Office for National Statistics said today in London. Economists had expected a gain of 44,000, according to the median of 27 forecasts in a Bloomberg News survey.

Prime Minister Gordon Brown today pledged 158 million pounds ($245 million) to help people who recently lost their jobs and said the U.K. government will do everything it can to help soften the blow of the recession.

Rate Forecast

The main U.K. lending rate has dropped 3 percentage points since October. The rate will drop another half-point to 1.5 percent at the next decision on Jan. 8, the median of 23 economists’ predictions in a Bloomberg News survey shows.

“It’s pretty clear that the MPC thinks that the general stance of policy remains out of kilter with prospects for the economy,” said Philip Shaw, chief economist at Investec Securities in London. “Rates will fall below 1 percent in the spring. The momentum of sterling means it’s vulnerable.”

The pound dropped to 91 pence per euro for the first time today, and has fallen more than 24 percent this year. The depreciation “should act to support net export growth,” policy makers said in the minutes payday loans for bad credit.

“Financial markets had priced in a cut of 100 basis points,” the minutes said. “There was a risk that going further could cause an excessive fall in the exchange rate.”

Fed Decision

The Fed lowered its rate to 0.25 percent from 1 percent yesterday and said it will use “all available tools” to generate a resumption in growth. European Central Bank President Jean-Claude Trichet signaled that further interest-rate reductions may be limited after a cut to 2.5 percent on Dec. 4.

“The monetary authorities have got to be aggressive,” former policy maker Charles Goodhart, now a professor at the London School of Economics and Political Science, said in a Bloomberg Radio interview to be broadcast today. He said King should approach next year with “courage, flexibility and perhaps going a bit too far with the very serious occasion we’re in.”

More to Do

U.K. policy makers said that more needs to be done to unfreeze lending between banks.

“The committee agreed that bank rate was not the right policy instrument to tackle supply constraints in the credit market,” the minutes said. “Further measures to underpin lending growth would be needed, building on the government’s package announced in October to recapitalize and guarantee funding to the banks.”

Brown last month cut sales tax to 15 percent from 17.5 percent as part of a stimulus package for the economy. King said yesterday that will further depress prices after the U.K. inflation rate fell to 4.1 percent in November from 4.5 percent the previous month. The bank aims to keep annual price gains at 2 percent.

The U.K. economy shrank 0.5 percent in the third quarter, and the central bank last month predicted it would contract through most of next year. Policy makers said at the decision that surveys signaled further drops in gross domestic product in the fourth quarter and the first three months of 2009.

“The committee agreed that a significant margin of spare capacity would open up over the next couple of years,” the minutes said. “It was most likely that, without further policy action, inflation would substantially undershoot the target in the medium term.”

Source

Starting at 4:30 p.m., it opens every few minutes. That lasts three hours. After that, every 20 minutes or so for another hour, then it tapers off until midnight.

A young Hispanic woman wants her regular small pack of Podium cigarettes, the cheapest at $6 with tax. A man in Docksiders and khakis buys two cans of Arizona tea and stuffs them into a backpack. An Asian woman in heels pulls money from her Louis Vuitton wallet to pay for two packs of DuMaurier. A middle-aged man wants a small Peter Jackson Light with his two cans of Arizona.

"If I get a dollar from the cigarettes, I’m happy," says Nebai.

"With Arizona, there’s not much profit, a few cents, but my customers love it. It’s good for you."

Times are tough all over, but "not much profit," that might as well be the theme song for Ontario’s convenience stores, which have been struggling to get by since the province banned the open display of cigarettes last summer. Between 45 and 65 per cent of corner store profits came from cigarette sales; since such "power walls" were banned that’s been cut by 30 to 50 per cent.

Dave Bryans, president of the Ontario Convenience Stores Association, expects a third of Ontario’s 10,000 convenience stores will be out of business in five years unless the province curbs illegal tobacco sales and starts letting proven, reliable stores sell beer and wine.

But, for now, shopkeepers like Nebai, earning just pennies per hour, make do selling what they can.

Cigarettes, snacks and drinks pay the bills, but not all of them. Since she bought the business in April and moved into the flat at the back, she’s been hunting for deals at Costco and Cash and Carry, clicking through Internet sites to find better suppliers. Rent is $1,600 a month.

A woman at Cash and Carry sent Nebai to Imperial Tobacco, so she gets some brands delivered. The rest she buys every morning, before she opens, whatever she is low on. Podium, made in Caledonia by Lanwest Manufacturing for sale off-reserve, comes from Costco.

With a diploma in accounting from Algonquin College in Ottawa and marketing courses from Seneca, Nebai has plans for this corner north of the Dundas West subway station. There’s a Slovenian deli next door, a Jehovah’s Witness temple down the street. Budget, Price Chopper and Shoppers are nearby. Houses on the streets behind her sell for just under a half-million. The store was Lee-Bee’s West Indian Grocery for years before a couple tried it as a variety store, then gave up and sold to Nebai. She inherited candles, ceramic frogs, hair extensions and shelves of Christmas decorations with the hardware, Pringles, canned spaghetti sauce and kitchen stuff.

Around 11 one morning, she grinds Van Houtte beans for a fresh pot, splits a pack of Hostess cupcakes on two napkins and settles down to talk.

"I loved Ottawa, but when I came here, I loved Toronto, too. It was my first time driving on a highway when I came here from Ottawa."

"I found this place online for a reasonable price. It’s a really good location, the main customer is from the subway, people back and forth in the morning and evening guaranteed approval payday loans. During the day, they come from the neighbourhood. There are a lot of East Bloc people living around here. Everyone is very nice, very nice. It was a struggle at first. I was sometimes shocked that nobody was here, but it’s picking up, slowly."

She and a friend left Asmara, the once-lovely Italianate capital of Eritrea, in 1985, when the 30-year civil war with Ethiopia was at its most brutal, walking for 11 days into Sudan. She was 25. "It was a terrible time. We were hiding from Ethiopian soldiers and Eritrean fighters. But the land around us as we walked was beautiful and we made a promise, my friend and I, that we would come back. She went to Sweden. She called me a few years ago to ask, `Remember the promise?’ But she is dead now, of cancer."

There’s not much room for sentimentality. A woman in a hijab and long skirt with no time to waste floats in looking for a toy for her son, who is 4 today. She leaves with Spider-Man and a long-distance calling card.

"I am so happy here," Nebai says. "There is hope for the future. I’m always thinking, planning the strategy."

She’s been asking the Ontario Lottery Corporation for a terminal and might just get one this month. If she gets approved and there is a machine available, the security deposit runs from $2,000 to up to $6,000 for a full-scale Lotto Centre.

A key-cutting service, cellphone cards, movie rentals, maybe stamps although a store not far away already sells them and Canada Post picks its spots based on postal code. If she buys 60 DVD movies, a company will throw in another 1,000 but she needs a $100 Film Exchange Retail Licence to rent them. Her cut from the ATM machine is half the $1.50 service fee; if she buys it for $2,500, her cut is 85 per cent.

"I tried bread but I had to eat it myself. Perishables are a waste of time – people go to Price Chopper."

She tours the shelves, rating each item. "Bathroom goods are well-demanded. The house materials are really working well."

She brought a Zippo lighter display cabinet up from the basement and added cigarette cases to the stock because customers asked for them. If she gets the lottery machine, if she gets the cell phone card business (a $1,500 down payment, then $14 a month), if she can buy the ATM machine, if she can rent DVDs, if she builds up enough loyal customers, she might make it.

The store opens at 9 a.m., closes at midnight. "Sometimes, it can be like a prison." Then she smiles. "I didn’t marry, I tried to. Now I like not answering to someone."

Her sister and two brothers, one with a master’s in engineering and another with a degree in economics, wanted her to move to Germany to reunite the family, but she prefers Canada. After a refugee camp in Sudan, she had gone to England for surgery on her leg, gnarled with polio. A United Church in Ottawa sponsored her as a refugee.

"It is amazing. I never thought that I would live in Canada. We studied it in geography in school – lots of snow! – and now I’ve become a Canadian. I feel at home here. Everyone is from far away."

Source

Tokyo-based Sony, which is cutting 8,000 of its 185,000 jobs, said yesterday it will shut five or six plants – about 10 per cent of its 57 factories.

Sony also plans to reduce its electronics investments by about one-third by the end of March 2010, although it did not give specific numbers. Sony will also cut at least 8,000 temporary jobs.

The job cuts are the most drastic here since the U compare car insurance prices.S. credit crunch hit over the summer.

Sony has been recovering from internal problems in recent years under cost-cutting reforms led by chief executive Howard Stringer.

Sony said the moves will deliver $1 billion (U.S.) in savings a year by March 2010.

As well, Sony will trim spending in semiconductors and will outsource output planned for image sensors for mobile phones.

Associated Press

Source